"Roblox reported third-quarter results this morning that exposed a fundamental tension in the platform's story. User engagement and monetization are accelerating sharply. Revenue, however, fell well short of expectations, landing at $1.36 billion versus the $1.70 billion consensus estimate. The stock fell more than 12% on the miss, but buyers are trimming that loss, suggesting investors are focusing on the momentum beneath the headline disappointment."
"The engagement data tells a different story than the revenue line. Daily active users jumped 70% year over year to 151.5 million. Hours engaged surged 91% to 39.6 billion. Bookings, which represent the economic value of transactions on the platform, grew 70% to $1.92 billion. Operating cash flow more than doubled to $546.2 million, and free cash flow reached $442.6 million, up 103% from the year-ago quarter."
"The revenue shortfall raises a critical question: why is engagement exploding while top-line results disappoint? The company guided for Q4 revenue of $1.35 billion to $1.40 billion, suggesting sequential weakness into the holiday quarter. That guidance also implies full-year 2025 revenue of $4.83 billion to $4.88 billion, still representing solid growth but not the acceleration the market may have been pricing in."
Daily active users jumped 70% year over year to 151.5 million and hours engaged rose 91% to 39.6 billion. Bookings increased 70% to $1.92 billion, indicating robust transaction activity and monetization momentum. Operating cash flow more than doubled to $546.2 million and free cash flow rose 103% to $442.6 million. Cash on hand grew 69% to $1.02 billion. Revenue of $1.36 billion missed the $1.70 billion consensus and the stock fell more than 12% intraday. Q4 revenue guidance of $1.35–$1.40 billion implies sequential weakness and full-year 2025 revenue guidance of $4.83–$4.88 billion. The gap between bookings growth and reported revenue suggests timing or recognition differences that warrant scrutiny.
Read at 24/7 Wall St.
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